Campervan company Tourism Holdings says full year profits will be lower than expected because of a fall in demand from foreign tourists, combined with a strong New Zealand and Australian dollar.
The company now forecasts a full June year operating profit before interest and tax of $14 million to $16m and a bottom line profit of $3m to $4m.
Australian business profits were expected to be worse than earlier market guidance, though its New Zealand and United States businesses were on track with previous guidance.
Earlier THL gave guidance of $19.3m in ebit and $6.7m in net profit after tax for the June year.
The Australian market remained tough, with heavy discounting and customers trading down to cheaper campervans. That was expected to continue in the coming year.
"The strong and sustained rise of the Australian dollar against currencies of core in-bound tourism markets is entrenching perceptions that Australia is an expensive destination," THL said.
Revenues in Australia in the past six months rose slightly because of strong domestic business which helped offset falling use by Europeans.
THL yesterday posted an after-tax operating loss of $500,000, in the December half year, down from $4.2m profit a year ago, when it got a boost from the 2011 Rugby World Cup
Despite the half-year loss the company declared a 2c a share dividend to be paid on March 22.
THL said the integration of the New Zealand rentals business with Kea Campers and United Campervans was hitting or beating targets for vehicle sales volumes and vehicle prices.
However, New Zealand rentals revenue fell 20 per cent to $20.2m. New Zealand rental earnings before interest and tax fell from a $2.9m profit to a loss of $2.2m.
- © Fairfax NZ News